Pay plans

Pay plans define the pay and work periods Payroll uses during payroll processing. Optionally, pay plans define how Payroll calculates overtime to meet FLSA requirements or collective bargaining agreement requirements.

Payroll requires separate overtime plans for different work periods and pay frequencies, and for other differences such as daily overtime calculation and fixed or fluctuating work periods for salaried employees. How does US payroll calculate FLSA overtime?

Payroll uses the first pay-period end date, the pay frequency, the first work-period end date, and the number of days in the work period defined on the pay plans to create pay periods and work periods for a year, plus one period into the next calendar year.

When you close Payroll for the year, Payroll creates the next calendar year pay periods and work periods using the parameters on the pay plan.

You must assign a pay plan to every employee in your company so that pay period ending dates can be derived based on the time record dates.

For employees exempt from overtime or employees for which you do not calculate FLSA Overtime, you can assign pay plans to the employees by pay frequency, by process levels, or by the company as a whole.

For employees who are not exempt from overtime, you must select an FLSA overtime pay plan on each of the employees' records.